Are lenders going to get desperate & start offering deals to those eligible, good credit, etc. to offset?

Question

what's happening with foreclosures? Aren't they suffering yet because of this & realizing that they need to start catering to those who actually have stability? And I'm not talking about 1% or no interest loans, those are scams & that's why it is the way it is right now.

Answer 1

i agree---what is wrong with the world today?

sooo many scams to get these people into the homes of their dreams and then those people have to foreclose because they were given a bad deal---so sad

and then no deals for those of us who pay on time and have excellent credit---what gives?

Answer 2

No... Lenders don't need to cater to anyone, despite the news making mountains out of mole hills, the current market decline isn't a big deal to most lenders. The lenders who offer sub-prime and alt-A loans factor in foreclosures into their business plans. In fact, some lenders depend on foreclosures so that they can re-claim the property and re-sell it over and over again. Every time they re-sell the same property they make even more money on it. But just because 1 or 2 companies are having problems now ( which have more to do with the honesty of their SEC filings than anything else ) doesn't mean that lenders are going to start kissing our butts.

People who have good credit do so because they already know the difference between predatory lending and smart financial decisions.

Answer 3

the lenders have already offered "deals" and that is part of the problem. The sub-prime loans were mad to people with less that good credit history but at a higher interest rate than normal loans. Many of those loans are now in default because the house bought is worth several thousand dollars less than purchase price. It's called a housing bubble,, the bubble has burst,, the air (money) is going out,, housing prices are falling,, a lot like when the .com bubble burst in the stock market a few years ago. Expect more of the same,, with economy slowing as result.

Answer 4

"Deals" are what got them into the mess that they are in now. Balloon mortgages are another culprit in this problem. A lot of the "scams" that you are talking about might have worked had the people who obtained them been able to keep their jobs. If you read the news you know that a lot of the mortgage companies are suffering and some are even going under...the majority of which are the sub-prime lenders, the ones who offered "deals". I've been in the housing market for over 40 years (buying and renting property) and only remember it this bad back in the late 70's and early 80's. I am in Michigan which is the hardest hit because no one here seems to get it that in order to survive we have to diversify and become less dependent on the automotive industry.

Answer 5

Lenders do not get desperate. They get rich off of floating loans. The percentage rates climb..their notes go up....they fall but they don't go any lower than a set rate.
Please listen....
Always try to get a fixed loan. Even if you pay more to get it started you will be money ahead because the cost of living is steadily going up every year.

In the 70's you could buy a 2000 sq. ft. house for $30, 000 ...today with the cost of living the same house is 10 x that amount. ..$300,000.

over the years the floating interest rates keep up with the times but a fixed rate would have still been 4%

Loan companies will always make big bucks off of ignorant people...educate yourselves.

Answer 6

I hope not. The housing trend should already be a sign to these lenders that they should really look into the documentation when borrowers want to take out home loans. I know they want to make money, but you lose out even more money in the long run when people default and can't pay for their mortgages.

Answer 7

The effect of the sub-prime market implosion is more likey to see investors tightening requirements than loosening up.